Commodity Radar: For gold, all roads now lead to a sell on rise trade. Fed decision remains key
Domestic gold rates continued their losing ways on Monday ahead of a slew of US economic data due to be announced later this week. While the chances of a December rate cut remain bleak, the numbers, including nonfarm payroll data, could be an important trigger as to which way the Federal Reserve could lean.
remains below Rs 126,500.
2) RSI
Yellow metal prices saw a sharp decline on Friday after it was known that the Fed would unlikely make any changes to the current policy rates.
According to CME Group’s FedWatch tool, traders now see a 49% probability of a quarter-point rate cut in December, down from 64% earlier this week.
Lower interest rates are positive for non-yielding gold.
Moreover, the end of the US shutdown also took away some sheen from the yellow metal.Also Read: Gold plunges Rs 5,000/10 gram, silver tanks Rs 8,700/kg. 3 reasons for yellow metal’s sharpest intraday slideCommenting on the current trends, Jateen Trivedi, Vice President, Research Analyst at LKP Securities said that the gold prices are adjusting to improving global sentiment after positive cues in US–China trade negotiations. Additionally, the US Federal Reserve signaling no immediate need for further rate cuts has strengthened the US Dollar, weighing on international gold prices, he said.
On the domestic cues, Trivedi said that the rupee’s weakness against the US dollar due to trade tariff uncertainty and foreign outflows is preventing a deeper correction in MCX, keeping domestic downside relatively cushioned.
In his view, rupee volatility will remain a key factor for the domestic bullion prices this week.
The commodity analyst spells out technical trends that are likely to impact gold price movement this week and suggests a strategy for traders:
1) Key support & resistance
Gold has slipped sharply after failing to sustain above the Rs 127,900 – Rs 128,200 resistance zone and has now broken below the short-term pivot of ₹124,150. The recent bearish candle shows strong selling pressure, confirming a lower-high structure.
— Immediate resistance: Rs 1,25,000 → Rs 1,26,500
— Support levels: Rs 1,23,000 (minor) → Rs 1,22,500 – Rs 1,21,220 (major S1 zone)
Price action indicates that any pullback toward Rs 125,000 is likely to attract selling interest as long as the price remains below Rs 126,500.
2) RSI
RSI has dropped to 38–40, signalling renewed bearish momentum. The indicator breaking below the 50 line confirms a trend shift from consolidation to short-term weakness. No oversold reversal signs appear yet.
3) Bollinger bands:Domestic gold rates continued their losing ways on Monday ahead of a slew of US economic data due to be announced later this week. While the chances of a December rate cut remain bleak, the numbers, including nonfarm payroll data, could be an important trigger as to which way the Federal Reserve could lean.
The December gold futures on the MCX were trading around Rs 1,23,043, down by Rs 518 or 0.42% from the Friday closing price. The story was identical in the international markets, with COMEX gold falling by over $17 or 0.4% and hovering around $4,076.60 per troy ounce at 1:10 pm India time.
Yellow metal prices saw a sharp decline on Friday after it was known that the Fed would unlikely make any changes to the current policy rates.
According to CME Group’s FedWatch tool, traders now see a 49% probability of a quarter-point rate cut in December, down from 64% earlier this week.
Lower interest rates are positive for non-yielding gold.
Moreover, the end of the US shutdown also took away some sheen from the yellow metal.
Commenting on the current trends, Jateen Trivedi, Vice President, Research Analyst at LKP Securities said that the gold prices are adjusting to improving global sentiment after positive cues in US–China trade negotiations. Additionally, the US Federal Reserve signaling no immediate need for further rate cuts has strengthened the US Dollar, weighing on international gold prices, he said.
On the domestic cues, Trivedi said that the rupee’s weakness against the US dollar due to trade tariff uncertainty and foreign outflows is preventing a deeper correction in MCX, keeping domestic downside relatively cushioned.
In his view, rupee volatility will remain a key factor for the domestic bullion prices this week.
The commodity analyst spells out technical trends that are likely to impact gold price movement this week and suggests a strategy for traders:
1) Key support & resistance
Gold has slipped sharply after failing to sustain above the Rs 127,900 – Rs 128,200 resistance zone and has now broken below the short-term pivot of ₹124,150. The recent bearish candle shows strong selling pressure, confirming a lower-high structure.
— Immediate resistance: Rs 1,25,000 → Rs 1,26,500
— Support levels: Rs 1,23,000 (minor) → Rs 1,22,500 – Rs 1,21,220 (major S1 zone)
Price action indicates that any pullback toward Rs 125,000 is likely to attract selling interest as long as the price remains below Rs 126,500.
2) RSI (14)
RSI has dropped to 38–40, signalling renewed bearish momentum. The indicator breaking below the 50 line confirms a trend shift from consolidation to short-term weakness. No oversold reversal signs appear yet.
3) Bollinger bands:
Gold has moved toward the lower Bollinger band, reflecting a volatility expansion on the downside. A sustained push along the lower band often signals continuation selling. The middle band near Rs 125,200 now acts as strong resistance.
4) Moving averages
Price has decisively broken below both EMA 8 and EMA 21, with EMA 8 now attempting a bearish crossover under EMA 21. This structure indicates that the short-term trend is bearish and pullbacks toward moving averages is a selling opportunity.
5) MACD
MACD is trending downward below the signal line, with red histogram bars expanding. This confirms increasing bearish momentum and supports the sell-on-rise strategy.
Gold trading strategy
He recommends a sell on rise strategy.
Gold remains under near-term bearish pressure, and every bounce towards resistance is likely to be sold into.
Sell near Rs 1,25,000 with a stop loss above Rs 126,500 on a closing basis and targets of Rs 1,23,000 and Rs 1,22,500. Bias remains bearish as long as gold trades below Rs 126,500.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
Gold has moved toward the lower Bollinger band, reflecting a volatility expansion on the downside. A sustained push along the lower band often signals continuation selling. The middle band near Rs 125,200 now acts as strong resistance.
4) Moving averages
Price has decisively broken below both EMA 8 and EMA 21, with EMA 8 now attempting a bearish crossover under EMA 21. This structure indicates that the short-term trend is bearish and pullbacks toward moving averages is a selling opportunity.
5) MACD
MACD is trending downward below the signal line, with red histogram bars expanding. This confirms increas, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)